Friday, February 21, 2020

JP Morgan's Schizophrenia

JP Morgan is perhaps the world's largest investor in climate-wrecking fossil fuels. The bank has also realized that the fossil energy economy has mankind on a precipitous road to an irreversible end.
The JP Morgan report on the economic risks of human-caused global heating said climate policy had to change or else the world faced irreversible consequences. 
The study implicitly condemns the US bank’s own investment strategy and highlights growing concerns among major Wall Street institutions about the financial and reputational risks of continued funding of carbon-intensive industries, such as oil and gas. 
JP Morgan has provided $75bn (£61bn) in financial services to the companies most aggressively expanding in sectors such as fracking and Arctic oil and gas exploration since the Paris agreement, according to analysis compiled for the Guardian last year.
The authors say policymakers need to change direction because a business-as-usual climate policy “would likely push the earth to a place that we haven’t seen for many millions of years”, with outcomes that might be impossible to reverse. 
“Although precise predictions are not possible, it is clear that the Earth is on an unsustainable trajectory. Something will have to change at some point if the human race is going to survive.” 
The investment bank says climate change “reflects a global market failure in the sense that producers and consumers of CO2 emissions do not pay for the climate damage that results.” To reverse this, it highlights the need for a global carbon tax but cautions that it is “not going to happen anytime soon” because of concerns about jobs and competitiveness. 
The authors say it is “likely the [climate] situation will continue to deteriorate, possibly more so than in any of the IPCC’s scenarios”.


John B. said...

That's precious.

I wonder how much of this stuff has been wrapped up and bundled into whatever they're calling the current equivalent of CDOs and then sold to pension plans.

The Disaffected Lib said...

It's no secret that pension plans are pretty heavily invested in fossil fuels. That's why people such as Mark Carney and many others have been warning them of the Carbon Bubble risks.

My guess is that major investors are afraid of abrupt action that might trigger a rapid market collapse. Think of the scene in the western with all the cowboys gathered around the poker table holding their cards in one hand, the other hand beneath the table clutching their six-shooters.